The Biz: Labels pile on extras to boost record sales

It's a sales method long associated with packaged goods and late-night infomercials-buy this one product and get another free. "But wait, there's more..."

Now, the music industry, facing a three-year sales slump and rampant downloading, is taking up that mantle in trying to lure buyers with extra features. Against a backdrop of record prices slashed by 30%, kicked off by the largest record company, Universal Music Group, labels are adding everything from PlayStation games and behind-the-scenes DVDs to remixed tracks and Web links that give fans more content.

"We need to reward the consumer," says Marilyn Batchelor, VP-strategic marketing and music licensing at Universal Music Group's Geffen Records. "They're spending their hard- earned money, we need to make it worth their while."

The moves aim at better understanding today's young music consumer, who is more "song savvy" and less invested in bands as brands, says Rob Souriall, VP-marketing, Hollywood Records. They're also more technologically equipped than any fans that came before them, causing marketers to start embracing digital distribution that will see 99¢ songs and $9.99 albums.

"There is no running from this. It's the future," Souriall says. "If it's easy and affordable, consumers will come. You don't get all of the fancy packaging, but kids don't care like we used to about that."

fan connection

Label executives are increasingly asking the artists themselves to come up with ideas on how to better ignite sales. Marketers at Geffen asked Blink 182 for something extra for their release next month, and the punk-pop band's members shot six videos for the enhanced CD. "They know their demo," Batchelor says, "and they know best how to reach them."

It's an approach that doesn't work for just any artist, label executives say. Fans must have enough of a connection that they want to get closer to the band. That usually means many of the incentives are applied to established acts. Those added features, whether they're contests or Web components, must be simple and easily accessible. They're intended to get buyers out as soon as the release hits stores-winning tickets or offers might be put in the first half-million CDs only.

`golden tickets'

Universal Music Group's Interscope Records launched a program recently with the release of emerging hip-hop star Obie Trice's first CD. The program put "golden tickets" inside a limited number of CDs. Fans who got the tickets won a trip to Detroit to meet Trice's musical godfather, Eminem.

It's vital that labels figure out what's important to the fans in picking the incentive, says Steve Berman, Interscope's head of marketing and sales.

"Is it a direct relationship with the artist, participation in the experience?" he asks. "We're looking at the Obie model and building on that."

Everyone's looking for the next twist, and marketers say that could involve pulling in other brands-packaged-goods, services or entertain ment-and retailers.

"If you take a me-too approach, you'll be left behind," says Mike Engstrom, VP-marketing at Warner Strategic Marketing, the marketing arm of the Warner Music Group. "We focus on additional content, and the tactile, experiential side."

For instance, the label tucked a DVD and a 48-page booklet into "The Very Best of the Eagles," recent release. The booklet was more than twice the size the label would usually create, and the DVD had interviews by filmmaker and former rock journalist Cameron Crowe with Eagles founders Don Henley and Glenn Frey.

A T-Rex compilation had packaging that mirrored the original gatefold album art, intending to appeal to the buyer from the `70s who knew it as an LP.